The Sensex, which gained 442 points in the last two sessions, gained another 225.95 points, or 1.28 percent, to 17,813.62, close to February 24 level.

The broad-based National Stock Exchange index Nifty regained the 5,400 mark by rising 69.95 points, or 1.31 percent to 5,429.50.

Brokers said market players were optimistic that reports of higher advanced tax payments by corporate indicate improved outlook for fourth quarter earnings. On Friday, the Reserve Bank had cut cash reserve ratio (CRR) for banks so as to infuse Rs 48,000 crore in the financial system to overcome the liquidity crunch.